Alliance race.

I'm going to be rolling an alliance priest, first time I've ever played a priest beyond level 15. What's the best race currently for PVE environment? I was thinking gnome because of the int bonus but I'm not sure if it matters a whole lot?

Human for spirit and free trinket. Gnome for mana and root escape. Those are your best bets.

Dwarf is an option, any fight with a bleed, disease, or poison you can stoneform off. Draenei has gift of the naaru, which heals for 20% of the target's hp over 15 seconds or so. Night elf is about worthless in terms of racials. Worgen has sprint, which is always helpful.

if you're going for pure racial bonuses, it's a toss up between gnomes and humans i'd say. if you want to heal, go human, for dps, go gnome. if you want to do both, go human. if neither of those appeal to you, dreanei is a good alternative in both regards. HoT for 20% health on a 3 minute CD for healing and 1% hit for DPS. next would be worgen with 1% crit, dwarves with only a defensive CD and then nelfs with... shadowform...?

He said PvE environment. Worgen is by the best race for a PvE Priest, purely because of Darkflight. There are so many encounters where an on-demand move speed increase is invaluable. If you'd prefer not to play worgen, and you're playing on playing Disc at some point, go with gnome for the extra mana returns on Rapture.